Why is Real Estate in Mumbai Out of Reach for Many Buyers
When looking for an apartment in Goregaon or real estate in Mumbai, it is necessary to do some research and find a reliable developer.
Majority of people living in Mumbai are in search for affordable housing. They are staying in rental apartments and wish to buy a house but it has become a difficult dream. Due to the rise in property rates, it has become nearly impossible for the middle-income buyers to own their dream house.
In this article, we will be discussing why real estate in Mumbai is out of reach for many buyers.
The asking price of more than two third of unsold housing inventory in the city is more than 1 Crore INR. This amount is not within the reach of many buyers. According to a study by JLL India, there are more than 44,032 residential apartments in Mumbai on offer, covering projects within the municipal limits of Mumbai. Out of this number, approximately 33,000 properties are priced for 1 Crore and above.
Property experts are of view that it is very important to reduce the size of apartments and limit construction costs in order to offer affordable homes to buyers. In last few years, many real estate companies have reduced the size of their project and focused on offering small units to property buyers. Reduction in average unit size has been approximately 26.4% in last five years in Mumbai. Compared to other cities, the average unit size in Mumbai has been the lowest. Developers are not only reducing the configurations of apartments, but also bringing changes in their strategies for catering to a large segment of consumers.
Majority of demand is for properties that are priced below 1Crore. This is an attractive segment that finds a lot of property buyers. But not many of us can do it within city limits, given the development premiums that need to be paid upfront and the rise in current land rates. This is one of the reasons why many developers are exploring areas in the outskirts of Mumbai such as Navi Mumbai and Thane. They are launching projects in these areas to offer apartments in the affordable range.
Due to the premiums and development charges to be paid to civic authorities, forming 30-35% of the project cost and these premiums rising over 300% in past three years, proportions of homes priced above this range are being expected to go up marginally.
According to property experts, there is a strong need for the government to review the scenario and consider the right measures for easing the pressure. Besides reducing the taxes, it is important for the government to improve infrastructure and connectivity as well. There is need to create more growth corridors with good economic activity so that people start residing in suburban areas as well.
Whether you are looking for an apartment in Goregaon or a row house in Andheri, it is very important to choose a reliable developer. There are several real estate companies in the market that are claiming to offer quality properties. Make sure you choose the right one for investment.
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ABOUT THE AUTHOR
Shruti works for a real estate company. She also writes articles on how to choose the right apartment in Goregaon or real estate in Mumbai.